The 59-year-old assumed office at Anfield at the start of June, filling the void left by Julian Ward after his predecessor's surprise exit at the end of the 2022-23 campaign.
Following Liverpool's failure to qualify for the 2023-24 Champions League, Schmadtke was tasked with supervising the Reds' shake-up of an ageing midfield, sanctioning exits for Jordan Henderson, Fabinho, Alex Oxlade-Chamberlain, Naby Keita and James Milner, as well as Roberto Firmino.
After abandoning their pursuit of Real Madrid-bound Jude Bellingham, Liverpool splashed the cash on four engine room acquisitions, adding Ryan Gravenberch, Alexis Mac Allister, Dominik Szoboszlai and Wataru Endo to the Anfield ranks.
All four players have become regular fixtures in Jurgen Klopp's first XI and have played pivotal roles in propelling Liverpool to the top of the Premier League table, while the Europa League, FA Cup and EFL Cup are also within the Reds' reach.
However, Schmadtke's tenure was always expected to be a short-term one, and Liverpool have now confirmed that the former Wolfsburg, Koln and Hannover director will depart at the end of the month.
"Liverpool is a very special club so to have had the opportunity to work here has been a huge honour for me, even though I knew from the outset that it would only be for a short period," Schmadtke told the official Liverpool website.
"I would like to thank everyone - the owners, manager, staff, players and fans - for the support I have been given and offer my best wishes for the rest of this season."
Fenway Sports Group president Mike Gordon added: "We would like to place on record our gratitude to Jorg for the important role he has played since joining Liverpool last summer.
"He has made a valuable contribution, both in terms of the support he provided to Jürgen Klopp and the assistance and guidance given to our outstanding football operations department.
"As well as departing with our appreciation for his efforts, we would also like to take this opportunity to offer Jorg and his family our very best wishes for the future."
News of Schmadtke's departure comes while Liverpool fans are still reeling from the news of Klopp's imminent exit, as the Premier League and Champions League-winning coach announced on Friday morning that he will be stepping down at the end of the season.
Klopp - who has spent over eight years in charge of the Reds - admitted that he was simply "running out of energy" to continue, and he is unsure if he will ever manage another club or national team again.